FTSE on the up

FTSE on the up

A recovery for banking and commodity stocks following a shaky start to the week ensured the FTSE 100 Index in London made headway today.

Barclays, HSBC and Royal Bank of Scotland were all in positive territory as nerves over Europe's sovereign debt crisis and the shock of two high-profile leadership changes began to fade.

With the Bank of England meeting City expectations by keeping interest rates at a record low, the FTSE 100 Index stood 42 points higher at 5472.

The improved London session followed a better showing from Asian markets and after the Dow Jones Industrial Average closed higher last night.

The progress came despite a poor performance from retail stocks after major players including Argos owner Home Retail Group, music retailer HMV and supermarket Morrisons highlighted softer consumer confidence.

Home Retail led the fallers board in London as it warned full-year profits were likely to be towards the bottom end of market expectations.

While it said Argos and DIY chain Homebase performed well in testing conditions, like-for-like sales for both divisions were still lower in the six months to August 28. Shares slipped 4% or 8.4p to 213p.

Morrisons was also under pressure as the supermarket warned it expected the recent low growth in like-for-like sales rates to continue. Underlying profits lifted 14% at the half-year stage but shares slipped 2.3p to 290.2p.

Outside the top flight, HMV shares fell 10% or 6.9p to 59.6p after it said first quarter like-for-like sales in the UK and Ireland dropped 14.9%.

It blamed a weak gaming market and the impact of the World Cup on the pipeline of new releases.

In the banking sector, Barclays saw its shares rise 2% or 5.9p to 313.9p as concerns faded over the appointment of multi-millionaire banker Bob Diamond as chief executive.

HSBC turned in a better performance after Tuesday's announcement that chairman Stephen Green is leaving the bank to become a trade minister, with shares lifting 3.5p to 658.3p. Royal Bank of Scotland was up 1.2p at 47p.

Commodity stocks bounced back after yesterday's fall in commodity prices, including the benchmark price of crude oil. Among them, Vedanta Resources lifted 56p to 2028p and BHP Billiton was ahead 41.8p to 1931p.

ARM Holdings occupied the top of the risers board for a second successive session after Investec upgraded the stock and traders followed speculation that the company's graphics chip will be used by Samsung for its new processor.

Shares leapt another 5% or 19.5p to 407.2p.

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